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New Law 2014 – Liquidated Damages for DLSE Minimum Wage Citations (AB 442)

Here’s another reason for California employers to know their California minimum wage obligations and to comply with them.

For a while now, a failure to pay minimum wage carried with it the penalty of having to pay not only the minimum wages owed but “liquidated damages” in the same amount (LC 1194.2).  Thus, if an employer failed to pay $250 in minimum wages to an employee, the employer would also owe $250 more in liquidated damages, for $500 total.

For a while now, the Labor Commissioner’s enforcement arm, the Division of Labor Standards Enforcement (DLSE), could audit businesses on the spot and issue citations for minimum wage violations on the spot (LC 1197.1).  The DLSE could then issue a citation for civil penalties ($100 for an initial violation for each employee for each pay period the employee was not paid minimum wages) and also order restitution, i.e. payment of the underpaid minimum wages to the employee.

AB 442 now makes the liquidated damages provision of Labor Code 1194.2 applicable to DLSE audits/citations.  So the DLSE can now order an offending employer to pay the civil penalties, restitution and liquidated damages.  This can add up very quickly to be sure to take note of California minimum wages increasing as of July 1, 2014 ($9/hr) and as of January 1, 2016 ($10/hr).